The move will likely help investment decision-making by stakeholders in the fast growing industry, based on due comparison of equivalent funds.
These benchmarks are the logical next step to the original category-level benchmarks introduced in October 2020 and provide peer comparison for AIFs belonging to seven sub-categories within the three broad AIF categories — I, II and III, it said.
There are three primary categories including listed or unlisted debt, equity and real estate funds, which can be gauged in view of the benchmark.
“With investors embracing the product and the industry maturing, there is a need for enhanced benchmarking practices,” said Jiju Vidyadharan, Senior Director, CRISIL Research. CRISIL’s sub-category AIF benchmarks will plug this gap, providing like-to-like fund comparison within its category.”
The Indian AIF industry, according to CRISIL continues to grow at a healthy pace, with commitments increasing 42% between March 2021 and March 2022 to Rs 6.41 lakh crore.
The benchmarks have been developed in accordance with the Securities and Exchange Board of India (SEBI) guidelines and in consultation with industry participants.
“The sub-category level benchmarks will be useful to all stakeholders — investors, intermediaries, and AIFs alike — as they provide a 360-degree view of the performance of a particular sub-category,” said Piyush Gupta, Director, CRISIL Research.
These will help investors home in on the type of fund best-suited to their investment objective, besides enabling intermediaries to focus on specific types of funds for their clients, and AIFs to compare their performance with a peer set,” he said.